Profit margins at grocery stores have always been razor thin. Among all businesses, food retailers have one of the lowest returns, typically 1 to 3 percent – often the equivalent of just pennies per item sold. And if you add continual minimum wage increases, rising wholesale food expenses and heightened competition for employees? Those margins get even thinner.
And that’s not all: Now, grocery retailers are also facing the added pressure of COVID-19-related cost concerns. There are new requirements and costly challenges, from pandemic cleanliness and adding new experiences like curbside shopping, to contending with supply chain interruptions.
It’s all happening at a time when the competition has never been hungrier. Along with traditional grocery stores, membership clubs like Costco and Sam’s Club, convenience stores, online grocery retailers, farmer’s markets and specialty food stores are vying for customer food dollars.
That’s why grocery and supermarket brands are increasingly turning to technology.